The Efficiency Experts

Automakers have made huge progress on emission standards, without harming the industry.

The presence of a small (and growing) number of vehicles like the Prius, which has a combined mileage rating of 50, is helping to push the average fuel efficiency higher.

Photo by Mike Blake/Reuters

The Environmental Protection Agency’s announcement this week of new standards for power plant emissions produced howls of opposition from manufacturers and coal-country politicians. How can America’s utility industry hope to meet the impossibly high standards set for the reduction of carbon dioxide emissions?

They could start by emulating the auto industry. There, in the past few years, the combination of higher government standards, consumer demand for better products, and the ingenuity of American electrical, chemical, and financial engineering, has brought about stunning progress—without torpedoing the economy or harming the industry.

On Tuesday, May auto sales were released. Some 1.6 million cars were sold, and the annualized rate stood at a healthy 16.8 million—the highest such rate posted since July 2006. Across the board—whether it’s big cars, vans, Jeeps, SUVs, or hybrids—vehicles flew off the lot. Oddly enough, this higher pace of sales is very good news for the environment.

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After years of stagnation, the American auto industry has finally gotten religion about fuel efficiency. Each month, researchers at the University of Michigan’s Transportation Research Institute crunch the reports put out by automakers. They take the number of vehicles—how many Nissan Altimas, how many Priuses, how many Jeep Grand Cherokees—and multiply them by the combined city/highway fuel rating posted on the sticker. Then they divide by the total number of cars sold to come up with an average number. And guess what? Pretty much every month, the fleet that hits the road is the most fuel-efficient fleet in history.

As the chart shows, the trend is unmistakable, persistent, and impressive.

The average car sold in May 2014 got 25.6 miles per gallon on the highway. That’s up marginally from 25.2 in April— 1.5 percent. It’s up 3.2 percent from 24.8 in May 2013. And it is up an impressive 5.5 miles per gallon, or 27.4 percent, from October 2007. (The figures reported here—the ones that appear on the sticker and are published in the EPA’s Fuel Economy Guide—are adjusted for real-world conditions. The unadjusted figures, based on laboratory conditions, are actually substantially higher, and can be seen here.) Put another way, the typical American car sold today needs nearly 30 percent less gasoline to move a mile than the typical car sold seven years ago.

It is simply harder to buy cars that get really pathetic mileage anymore.

That’s impressive, especially when you consider the history. Michael Sivak, who compiles the data, notes that between 1923 and the late 1970s, gas mileage actually declined. While cars’ performance improved after the oil crisis, the rising popularity of sport utility vehicles, vans, and pickups kept the aggregate performance of the U.S. light-duty vehicle fleet from rising much in the 1990s and 2000s. “Increasing the mileage of a typical new vehicle by 5.5 miles per gallon over the course of seven years is a large change, especially in view of what we have done for the past 80 or 90 years,” Sivak said.

There are several factors at work here. First, a small number of cars get truly off-the-charts mileage figures. The website hybridcars.com each month publishes a handy dashboard that tallies the raw numbers and market share of hybrids, plug-in hybrids, all-electric vehicles, and clean diesel cars. In May, hybrids (3.26 percent of sales), plug-in hybrids (0.42 percent of sales), and all-electric cars (0.36 percent of sales), combined for nearly 65,000 units, or about 4 percent of sales. The presence of a small (and growing) number of vehicles that have combined mileage ratings of 50 (like the Prius), or 95 (like the Tesla Model S), is helping to push the average higher.

Second, as gasoline prices remain at a high plateau. The Energy Information Administration says gas costs $3.75 a gallon in the U.S. and hasn’t fallen below $3 a gallon since November 2010. So more and more people are actively looking for more fuel-efficient vehicles. The Toyota Camry, the second-best-selling vehicle in the U.S., saw sales rise 30 percent in May 2014 from May 2013. Honda sold nearly 40,000 Accords, the fourth-best-selling vehicle in the U.S.—up nearly 20 percent from May 2013.

Third, and more importantly, there’s a solid underlying trend of continuous improvement. Auto manufacturers are using smaller engines, lighter materials, and new innovations. It is simply harder to buy cars that get really pathetic mileage anymore. General Motors no longer sells the Hummer. Light hybrid technologies, which introduce more electricity into vehicle motors—like Ford’s EcoBoost and General Motors’ eAssist—are becoming more prevalent. The 2014 Jeep Grand Cherokee, equipped with a nine-speed transmission, can get 31 miles per gallon on the highway. And there’s much more to come. Next year, Ford’s popular F-150 pickup trucks will have bodies made out of lighter aluminum. When it comes to mileage, for many models, 25 is the new 15, and 35 is the new 30. “New car buyers will get better mileage, even if they stick with the same model,” said Sivak. “There’s an inherent improvement in fuel economy from year to year.”

A lot of this activity is being driven by the tough new standards promulgated by the EPA in 2012. By 2025, light-duty vehicles will be expected to release emissions equivalent to a 54.5 miles-per-gallon rating. That’s not to say the typical car will get anywhere near that mileage in 11 years. (Automakers will get credit toward that goal by producing zero-emission vehicles, purchasing credits, and by taking other steps to reduce emissions.) But Sivak looks at the progress made in the past few years and concludes, “We’re slightly above where we need to be.” He expects that the average mileage of new vehicles sold will hit 26 some time this year.

To me, the steady improvement in basic vehicles at entry-level price points is the most interesting and heartening development. Hydrogen-powered cars won’t be a thing any time soon. The Tesla and the Prius alone won’t jack up America’s collective fuel efficiency. But the innovations they pioneered—and the example they set—trickle down quickly. Ten years from now, lighter materials, start-stop technology, and regenerative breaking will likely be standard. Continuous, incremental improvement may not take the U.S. vehicle fleet all the way to the 2025 goals. But it can get us most of the way there.